COMMUNISM: You have 2 cows. The State takes both and gives you some milk.

FASCISM: You have 2 cows. The State takes both and sells you some milk.

BUREAUCRATISM: You have 2 cows. The State takes both, shoots one, milks the other, then throws the milk away…

TRADITIONAL CAPITALISM: You have two cows. You sell one and buy a bull. Your herd multiplies, and the economy grows. You sell them and retire on the income.

VENTURE CAPITALISM: You have two cows. You sell three of them to your publicly listed company, using letters of credit opened by your brother-in-law at the bank, then execute a debt/equity swap with an associated general offer so that you get all four cows back, with a tax exemption for five cows. The milk rights of the six cows are transferred via an intermediary to a Cayman Island Company secretly owned by the majority shareholder who sells the rights to all seven cows back to your listed company. The annual report says the company owns eight cows, with an option on one more. Sell one cow to buy political leverage, leaving you with nine cows. No balance sheet provided with the release. The public buys your bull.

******************************************

AN AMERICAN CORPORATION: You have two cows. You sell one, and force the other to produce the milk of four cows. Later, you hire a consultant to analyse why the cow has dropped dead.

A BRITISH CORPORATION: You have two cows. Both are mad.

AN IRAQI CORPORATION: Everyone thinks you have lots of cows. You tell them that you have none. No-one believes you, so they bomb the **** out of you and invade your country. You still have no cows, but at least now you are part of a Democracy….

For a long time now, I’ve enjoyed Ben Goldacre’s regular Saturday column in the Guardian. In more recent times, I’ve enjoyed the occasional visit to his website, Bad Science. Last week, I began reading his book of the same name, in which, among other things, he castigates pedlars of scientific opinion as fact and illustrates with startling clarity the way in which skilful PR so often overcomes truth.

Having read only a few chapters of the book, two things strike me with some force:

Firstly, how truth is manipulated with “sciency” words to create convincing alternative realities for no reason other than to generate super profits – or, to use the alternative description, add value – for example, wrinkle removers with some convincingly named super chemical.

Secondly, how the effectiveness of these manipulations depends on our gullibility or ignorance.

This seems to me to have alarming parallels in politics, where the Dave and George show in particular wants us to believe in their commitment to the NHS and selected other public services while simultaneously proposing massive cuts in government spending. How does that work guys?

Another useful pointer in Bad Science is how a conclusion based on common sense – a phrase used so often to mean I can’t be bothered to think about it – is very often demonstrated by deeper analysis to be incorrect. For example, claims that a particular chemical or substance reduces specific health risks are sometimes debunked by further analysis of the effects of that chemical or substance on other health risks – which turn out to be far more damaging than the risk initially averted. This sounds to me like the argument over whether the government should spent more or tighten its belt. The intuitive response may well be “we must live within our means” whereas the people recognised by their peers to have completed meaningful further analysis have pointed out that that intuitive response will only make the economic situation even worse.

I claim no expertise in economics but I know which of PR glitz or informed analysis I’d rather rely on.

As, I suspect, many others in this country, I’m disillusioned with politics and politicians. We have two main political parties following broadly similar agendas and a rash of politicians seemingly more interested in gaining power than actually taking care of business – why wouldn’t loads of us feel fed up? But, as Johann Hari explained in the Independent:

“Martha Gellhorn, the great war correspondent, said: “People will often say, with pride: ‘I’m not interested in politics.’ They might as well say, ‘I’m not interested in my standard of living, my health, my job, my rights, my freedoms, my future or any future.’” Be serious. It might seem remote; it might seem difficult; it might be a world away from the arcane mumblings of Brown and Cameron; but unless you are a psychopath, you care.”

Johann asks us to recognise that “Far from being some dreamy call to kumbaya, collective political action is the single biggest reason your life is incalculably better than that of your great-grandparents.”

And to remember that “Politicians respond to the pressures put on them. The banks and oil companies and billionaires never stop putting on their pressure, waving their cheques, and making their threats. We need to make sure our collective voices talk louder. The only way to do that is to give your time and energy and dedication to demand genuine democracy.”

It doesn’t much bother me which political party is saying it but the one that pretends, despite the collective opinion of respected economists and commentators who predicted the hole we’re in now, that cutting public spending and thereby putting hundreds of thousands more people out of work is asking those “turkeys” to vote for Christmas. The tragedy is, that whether through frustration or misinformation, it seems that the electorate is planning to do precisely that.

On the face of it, many people will understand BA’s decision, announced in July, to negotiate the use of £330 million of its staff pension fund’s assets to help the company through a difficult trading period. But, as carefully spun as the announcement was, it hides something fundamentally wrong behind its facade of preserving jobs, something we all have to be in favour of.

That something is that, when the business was alledgedly thriving, BA’s management apparently decided that it would be a good wheeze to pass on the benefit of their profits to top management and shareholders while simultaneously denying the pension fund access to £330 million. How did they do that? Easy-peasy – don’t give the pension fund cash, give it a bank guarantee that we’ll pay some time later. And now, when the s*** hits the fan, who do they ask to cough up? Not top management, not the shareholders, but the employees who stand to lose part of their pensions if, as must be distinctly possible, BA can never pay the £330 million. And this on top of the £3 billion current deficit in the pension fund that some say already makes BA technically insolvent.

It is of course the responsibility of its trustees to protect the pension fund but what realistic chance do they have of fulfilling that responsibility when their arms are twisted behind their backs. Logically, the best they can hope to achieve is the preservation of at least some of the pension funds.

And, apparently, BA isn’t the only company replacing cash commitments with what are termed “contingent assets”. It was reported in The Guardian on 18 July that, over the last 5 years, other leading British companies have been doing much the same thing.

In June, Barclays announced plans to close its final salary pension scheme to existing members, compromising pensions for about 17,000 staff – but excluding 1,500 of the bank’s top earners. How much were the bonuses on the sale of Barclays Global Investors?

There’s no escaping the near certainty that benefits for most employees will have to be cut because there just won’t be enough cash available to meet these commitments. And there’s no escaping the truth that longer life expectancy and our ageing population are major contributors to that problem. But, not for the first time in the recent past, it’s not the business owners or top managers, those who have benefitted most in the past, but the vastly superior number of employees who are expected to pick up the tab.

Would it be appropriate to describe BA’s and Barclays’ management of their pension commitments as being based on the mushroom principle: “keep ’em in the dark and periodically spray s**t on them”? Whether or not that’s fair, these events have all the hallmarks of yet more arrogance and greed at the top of British business.

Over the last 18 months or so, I’ve joined the legions who now follow Richard Murphy‘s fabulous blog. I have long wanted to add something more than supportive comments but been blighted by the British disease, “who’s going to listen to me?”. Today, Richard has pointed me towards another accountant who I guess has trodden the same path. Whether or not anyone reads what I have to say, thank you Richard for the inspiration and Financial Ranter for the kick in the pants!